City of Chandler seeks to recoup sales taxes from online travel companies

The city of Chandler is turning to legal action to recoup $131,000 in sales taxes that city officials allege online travel companies haven’t paid.

The Arizona Republic reports that the figure is based on a preliminary audit of several cities in metro Phoenix that alleges about $8 million in unpaid taxes are owed to the cities by at least four online travel companies, including Expedia, Orbitz, Priceline and Travelocity.

Currently, if an online travel company buys a discounted hotel room at, for example, $40, then sells it to a customer for $100, it does not pay taxes on the $60 difference.

But Chandler officials believe those sales should qualify as a brokerage transaction under the city’s tax code and should be taxed for the full amount.